Business transformations are notoriously hard and many businesses fail to make them count even if they execute them successfully. And executives are left wondering how to do it right with many resorting to the most easy (and ineffective) solution – more financing. Unfortunately, most business transformations require more than rich financial supply lines. They demand a more nuanced approach towards upticking the entire business process and potential.
Moreover, a lot of them think that simply applying AI will help them transform their businesses. This is not true either and in fact, a recent study has shown that over 77% of employees think that AI makes their jobs harder.
So what’s the big holdup? Why do most business transformations get stuck at a bottleneck? The answer is multifaceted and demands a fair bit of looking into it. The long and short of it, however, is that most business transformations fail because they are poorly planned and executed. Most businesses do not have the requisite skill planning and upgrading required to make use of technology like AI.
So, the answer lies in creating the right foregrounding and mindset in the business to ensure the business transformation goes through. Let’s look at the 5 key areas where your business transformation will benefit if you prepare your organization:
3 Factors to Enhance Your Business Transformation’s Process
The Right Plan
Key Takeaways:
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Many business transformations fail because of poor planing and lack of employee engagement.
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This causes lack of operational efficiency increase and longer-term business revenue loss.
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Business transformation planning must consider executable at all stages of implementation to achieve lasting success and successful transformation values.
One of the biggest failures of businesses when looking to transform their operations comes by way of their planning. Most failures happen because people fail to anticipate outcomes or overshoot their transformation expectations. Companies that require a long time to transform also suffer from operational loss much like the US healthcare website launch debacle in 2013. Here’s a quote from a Harvard study on the incident:
High website demand (250,000 users [5 times more than expected]) caused the website to go down within 2 hours of launch. While website capacity was initially cited as the main issue, additional problems arose mainly due to the website design not being complete. Due to poor planning, this same login method was also used by website technicians, making it extremely difficult for them to log in and troubleshoot problems.
Why Creating Business Transformation Foreground Matters
While this study is from 2016 and the incident from more than a decade ago, the recent Crowdstrike debacle shows that we are still in need of proper planning and QA at all levels. Similarly, businesses must create proper business transformation plans that account for all possible factors and then implement realistic buffers to handle overload and outages. Mostly, business transformations require a layover at the organizational level. Overcoming this requires that transformations are either executed in rapid time or sequentially to ensure that regular work is not disrupted.
Consider how many companies are looking to adopt AI into their active working process. Moreover, how many companies have been working with remote teams because of COVID and straggling with a slacky productivity margin? Most of them are midcap companies and have to plan it out well to understand where and how to leverage automation. Is it sales? If so, then at what stages of the funnel? How about email marketing or customer support? Can their company product work with that kind of automation? All of these questions and their outcomes must sequence how a company pursues its business transformation goals and capitalizes on outcomes.
3 Factors to Enhance Your Business Transformation’s Process
The Right Executors
Key Takeaways:
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Business transformation executors are essential for ensuring success.
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Business transformations planned strategically with gen AI may offer scenario mapping and better outcome options.
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Business transformation must also become an ongoing process to keep up with the market.
Business transformation leaders play a huge role in making sure that the transformation goes successfully. The exact person to take up the role depends on the nature of the organization and how they plan to proceed with business after the work is done. The right executors must not only foresee the process planning, its execution, and sequential implementation but also outcome and post-implementation reporting. In that regard, achieving higher human sustainability is a key factor that may influence the long-term possibility of beneficial outcomes.
A good example of how strong prospects may turn to failure is showcased by the Nokia acquisition by Microsoft. A poor execution of Nokia’s possibilities right at the time of the mass popularization of smartphones pushed it far back in the market. Even in 2024 and with the backing of a major company like Microsoft, the company has not managed to regain its former dominance as seen in the candybar phone era. Here’s an excerpt from a recent study on Nokia highlighting the reasons for its failures:
Nokia failed in the phone market because it ignored the market, competitors, and the needs of consumers. In addition, the company was reluctant to directly use excellent operating systems. Nokia’s story tells us that there is no eternal king, only constant change. The rapid development of the Internet age makes consumers face new things every day. Mobile phones are highly integrated products with the Internet. We cannot ignore the rapid changes in the market. Industry giants must also adjust their R&D direction in time to keep up with changes in consumer demand.
How Companies Should Define Business Transformation Executors
Countering possible planning and execution redundancies demands thorough organization and careful execution. But more than that, it requires creativity to overcome emerging challenges and develop counter-strategies to resolve innovation bottlenecks. For example, executors with the right vision can implement internal social networks that help employees network better and create more value for every sale or business project they undertake.
One of the ways to do that is to integrate generative AI into the C-suite and create what the hosts of this BCG podcast call ‘strategic conversation starters”. They explain how they used AI to look at military defense scenarios and raise red flags using wisdom from military generals to map out scenarios.
Much in the same way, they can also use strategic scenario mapping to enable better business transformation while also using gen AI to execute minor tasks. The result is a better handling of the overall process and outcome from each successfully executed module.
3 Factors to Enhance Your Business Transformation’s Process
The Right Skills & Upgrades
Key Takeaways:
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Skill gaps are among the biggest causes of failure in business transformation.
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Skill development enables business value generation before, during, and after transformation procedures.
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Businesses that invest in employee engagement and mentoring tend to gain higher benefits from their business transformation campaigns.
Skill gaps are easily the biggest issue when it comes to successful business transformations. In many cases, workers are not able to work up the skills required to make use of newly implemented technologies. In other cases, they may take time to adopt new business models and in doing so, cause revenue losses for the company.
In all such cases, creating appropriate development models for work skill sets before implementing business transformation is the answer. Most business transformations are implemented to raise operational efficiency.
For that, they must have appropriate employee engagement so that they can work up the organizational skill level to transform the revenue output. GE’s famous digital transformation failure is a perfect example of this scenario where the required skills simply do not exist in an organization to give it the full benefit of its transformation. Here is a look into what went wrong in this Forbes article:
Digital transformation has been pivotal to General Electric’s (GE) corporate strategy for years. The company first announced its Predix industrial software platform in 2013 and has since positioned itself as a “digital industrial” company. Though GE started to cover ground toward its digital transformation goals and began generating revenue from the Predix platform, the company ultimately failed to drive an organization-wide evolution. Decisions about what technology to implement were made by individual business units, and the GE Digital arm was tasked with turning a profit quickly rather than with a focus on meeting customer needs. The result: The departure of its CEO last year and the decline of its stock value from $250 billion in 2015 to $90 billion in 2019.
The issue here revolved around utilizing digital infrastructure to generate more profit. Instead, the company needs to focus on delivering better value and turn towards a better overall customer experience. This quantity-over-quality approach led to its rapid price devaluation and alienated a sizable portion of its active consumer base.
The optimal approach is to create a skill development scenario where companies stand to gain real advantages from cutting-edge systems and procedures. A recent Fortune article stated that businesses lack value, confidence, and expertise when it comes to adopting AI. It further stated, that when it comes to the “confidence gap,” businesses are “not confident enough to take those AI applications or models to production, because they are not sure about the accuracy,” he continued.
How Should Business Pursue Business transformations to Achieve Success
Business transformation is not a one-time application but an ongoing process that requires strategic planning at an ongoing level. Gaining lasting ground in the fight towards better business performance and revenue gains requires strategic planning, and execution with rapid and streamlined skill growth. Companies should also develop a representative organizational culture and keep developing transformation goals as they overcome operational bottlenecks.
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